U.K. Finishes First New Post-Brexit Trade Deal in Australia Pact
U.K. Finishes First New Post-Brexit Trade Deal in Australia Pact
(Bloomberg) -- The U.K. and Australia finalized a landmark trade deal, the first post-Brexit agreement reached by Britain that goes beyond rolling over a previous relationship with a European Union trading partner.
The agreement, which includes controversial provisions to open up the British market to Australian agricultural goods, was signed late Thursday, according to a statement from the U.K.’s Department for International Trade. Bloomberg News revealed a deal was imminent on Wednesday.
Though the accord is only expected to have a modest impact on the British economy -- the U.K. government predicts a 0.08% boost to GDP over the next 15 years -- International Trade Secretary Anne-Marie Trevelyan touted it as a benefit of leaving the EU. Boris Johnson’s administration is keen to highlight Brexit upsides given how new barriers with the EU have contributed to a decline in overall trade as a proportion of economic output.
The final text includes measures such as easing business travel between the two nations, and giving British services firms more access to the Australian market. The department said it will unlock an additional 10.4 billion pounds ($13.9 billion) of annual trade with Australia.
“Today we demonstrate what the U.K. can achieve as an agile, independent sovereign trading nation,” Trevelyan said in a statement. “This is just the start as we get on the front foot and seize the seismic opportunities that await us on the world stage.”
For Australia, the deal is a much-needed boost for exporters and farmers amid an ongoing spat with top trading partner China, which has restricted or banned products from wines to timber, coal, beef and lobster. Australia will benefit from the scrapping of tariffs on over 99% of goods exports to the U.K. valued at around A$9.2 billion ($6.6 billion), its government said Friday.
The U.K. is Australia’s fifth-largest trading partner with two-way transactions most recently valued at A$36.7 billion, according to the Department of Foreign Affairs and Trade. Gold, lead and wine are among Australia’s top exports to the nation.
Other measures in the FTA include:
- Around A$43 million in annual customs duties will be removed from Australian wine when the agreement enters into force
- Professionals will have the same access to the U.K.’s jobs market as their European competitors, except from the Republic of Ireland
- Young people will have more time to travel to the U.K. for a working holiday and will be able to stay longer
- Australian businesses will have the guaranteed right to bid for a variety of U.K. government contracts in a procurement market worth an estimated half-a-trillion dollars annually
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